TerraWest Energy Provides Update of Liuhuanggou CBM Project

Petromin Resources announced that TerraWest Energy Corp has provided an update of the exploration activities in the field at its Liuhuanggou coal bed methane project in Xinjiang, China. 

The 2012 Field Program was initiated in early November 2012 and involves drilling, casing and completing production wells at two key selected locations.

Well LHG12-02 spudded on 11 November 2012.  The well, which is located in the vicinity of previously drilled well LHG10-02, reached the planned total depth of approximately 750 metres and was cased.  Completion of the well and fracture stimulation of prospective formations is planned for spring 2013.

The target formation is the Jurassic Badaowan (J1B) which contains multiple coal seams and prospective surrounding rocks.  The well intersected target coals as planned and initial indications from geophysical logs show that key zones reflect gas potential as expected and some surrounding rocks above coal seams show excellent additional gas potential as well.

Well LHG12-02 is located such that a multiple pilot production configuration can be considered in the future.  In particular it is planned that wells LHG12-02 and LHG10-02 will communicate once completed.

Drilling at LHG12-01, located to intersect and test the thick coal seams in the Jurassic Xishanyao (J2X) formation on the west side of Liuhuanggou, was to follow LHG12-02 and due to the weather conditions will now be initiated in spring 2013.

Key work to follow this drilling campaign includes the completion, fracture stimulation and production testing of wells.

Petromin's interest is held through its current 22.28% ownership in TWE. TWE holds a 47% interest in and is the operator of the Liuhuanggou CBM production sharing contract located in the Junggar Basin of Xinjiang, China.  China National Petroleum Corporation (CNPC) holds the remaining 53% of the PSC.